Life’s Great Mysteries: Do People Really Buy JetBlue Points?!

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Through June 30, 2017, JetBlue’s TrueBlue program is offering up to a 50% bonus on purchased points. The promotion is tiered, so you earn between 20% and 50% bonus points, depending on how many points you buy, as follows:

  • Buy 3,000 – 9,500 points = Get 20% more
  • Buy 10,000 – 19,500 points = Get 30% more
  • Buy 20,000 – 29,500 points = Get 40% more
  • Buy 30,000 points = Get 50% more

JetBlue lets you purchase at most 30,000 points per transaction, and at most 120,000 points per calendar year. So if you max out this promotion you can purchase 45,000 points (including the 50% bonus) at a cost of $886.88, which is a cost of ~1.97 cents per TrueBlue point.

Now here’s my question. Selling points can be huge business for loyalty programs. Many loyalty programs generate tens of millions of dollars of revenue annually by selling points directly to consumers. This can be a win-win for both programs and consumers.

Then there’s JetBlue. They frequently sells points, and it confuses the heck out of me. Let me start by saying that I love JetBlue, and I think TrueBlue is a solid program. However, JetBlue’s loyalty program is strictly revenue based, where the cost of a redemption is tied directly to how much a ticket would cost if paying cash. There are no arbitrage opportunities with TrueBlue. It’s the only major US program I can think of where buying points during one of their promotions never makes sense.

At most each point will get you roughly 1.5 cents towards the cost of a ticket. If you have the JetBlue Plus Card (and it’s a great card that I have) you get 10% of your points back every time you redeem, so at most you’ll get about ~1.65 cents of value per point. That doesn’t account for the points you’re forgoing by redeeming points rather than paying cash. That’s why I value JetBlue points at ~1.3 cents each.

Now, some might say that people are buying points in order to top off an account for a redemption, which is possible, though the above price is only when you buy at least 30,000 points, which is more than just topping off an account. If you’re buying 3,000-9,500 points, you’re instead paying ~2.7 cents per point.

But the thing is, I assume that people are actually buying points, or else they wouldn’t keep bothering with these promotions, or at a minimum they’d modify the promotions to make the value proposition more of a win-win.

So… who are these people buying points through a revenue based program at significantly more than what those points can be redeemed for, even under the best of circumstances?!

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Comments

  1. Super niche case, but with Mosaic status you can use points at a 10c/point valuation to buy Even More Space seats. But given the number of points most with status already have and that it’s only 1,000pts/flight I can’t imagine you’d ever want to buy 50k points for that.

  2. I guess people could be doing it for the Topcashback. But then… you neglected that little detail didn’t you?

    And then you have the chutzpah to post a referral link?

  3. Did you really just post a affiliate link to buy points and then castigate the people dumb enough to buy points all in the same breath? Shameless.

  4. @Stvr, then why even mention it if it is not an incentive? That’s basically confirming what Ben wrote about that buying points have no value

  5. Another mystery: People who fly around the world nonstop as a “living” reviewing seats, lounges and hotels and not actually seeing the countries they visit.

  6. people working with JetBlue Mosaic status and middling AA-status/AA’s reduced-mileage award chart/erratic availability? kinda stabilizes everything while I learn on the fly (no pun intended). clearly, I’m from Houston.

  7. Preying on the dumb, I’m afraid. People hear “bonus” and their eyes light up…many don’t even consider doing research to see if the value proposition is worth it.

    Also, as for the point that “with Mosaic status you can use points at a 10c/point valuation to buy Even More Space seats,” to that, I say LOL. Even lowly golds on UA (or the equivalent status level on other mainlines) can pick them for free. That’s why I’ll never be “loyal” to jetblue despite how much I like their mint product.

  8. @Brian why put “living” in quotes? Are you implying that he’s not making a living?

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